Nate Bruce, Farm Business Management Specialist, nsbruce@udel.edu
New corn prices have traded in the $4.75 to $5.00 per bushel range throughout October thus far. Total open interest is trading sideways currently for corn. The total open interest is the total of all futures and options entered and not offset by delivery. This is a bullish sign that could signify a market bottom, but remember it is also harvest time as well. Make sure to pay close attention to corn market prices for the remainder of the month. Soybean prices continued their decline in October until USDA dropped expected production in the USDA World Agriculture Supply and Demand Estimates Report (WASDE). See more on this in the next paragraph. November soybeans were on the verge of breaking resistance lower than $12.50 but surged in the last week. The margin for error continues to be tight on soybeans due to decreased national acreage planted. Wheat prices have been a mixed bag thus far in October.
The October USDA WASDE estimated corn ending stocks decreasing by 4.95% from the September 2023/24 outlook estimate from 2,221 million bushels to 2,111 bushels. Beginning stocks for corn decreased from 1,452 million bushels to 1,361 million bushels. Production also decreased from the September estimate from 15,134 million bushels to 15,064 million bushels. Corn demand decreased with lower estimates for total domestic use and exports. Ethanol demand increased in the October estimate, driven primarily by rising gasoline prices. The corn season-average farm price per bushel increased from the September estimate by $0.05, from $4.90 to $4.95 per bushel. The October USDA WASDE estimated the corn bushel yield per acre reducing from 173.8 bushels per acre to 173 bushels per acre. The USDA WASDE estimated soybean ending stocks remaining unchanged from the September estimate of 220 million bushels. The October estimate decreased supply from 4,426 million bushels to 4,403 million. Beginning stocks increased from the September estimate but a reduction in production reduced total supply. Soybean demand also decreased in the October estimate from 4,206 million bushels to 4,183 million bushels. Crushing and residual demand increased, but a significant reduction in export demand offset the increases. The October estimate slightly reduced the bushel yield per acre from 50.1 bushels to 49.6 bushels. The soybean season average farm price per bushel remained unchanged at $12.90. Wheat ending stocks increased from the September estimate from 615 million bushels to 670 million bushels. Wheat supply increased from the September estimate with increases in beginning stocks, production, and imports. Demand also increased with domestic total demand increasing. The average farm price per bushel dropped $0.20 from $7.50 to $7.30. The bushel yield per acre increased from the September estimate from 45.8 to 48.6.
In international grain market news, Russia has destroyed 300,000 metric tons of Ukrainian grain since terminating the Black Sea export grain deal in the Summer. Russia continues to attack grain export facilities, reducing Ukraine’s grain export capacity by 40%. The European Union has insisted China in getting Russia to readopt the Black Sea export grain deal. China formerly received a quarter of the overall grain exported under the Black Sea corridor agreement. China itself experienced pre-harvest rains that were detrimental to the nation’s wheat crop, reducing it for the first time in seven years according to USDA Foreign Agricultural Service. Chinese wheat imports may be on the rise with USDA forecasting the country to import 11 million tons. Brazil is currently planting soybeans at a record pace, with the country forecasted to produce 162 million tons, a 4.8% increase from the previous year. Motivated by current soybean prices, expected corn production is estimated to drop 9.5% from the previous year.
Corn Futures
Soybean Futures
Wheat Futures
